Independent lender MotoNovo has called on dealers to make sure finance and supporting tools are prominently available online, in order to ward off potential challenges from high street supermarket banks offering personal loans.
Although motor finance volumes are increasing, MotoNovo noted that personal loan borrowing has also increased over the past two years, with car buying a prominent reason for doing so.
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MotoNovo chief executive officer Mark Standish said: "We have been conscious of the need to help dealers to change the fundamentals of dealer finance to address the inevitable return of direct and high street lenders. The risk is that their return can all too easily see dealer finance slip back into an unsustainable commoditised position. We are now seeing this threat starting to emerge."
The lender said that a typical vehicle buyer will usually visit two car showrooms before making a buying decision. Prior to these visits, the buyer will usually have researched their chosen vehicle in detail and assessed affordability. "This may often only been based upon a personal loan, missing the affordability benefits of a PCP," the lender warned.
Standish added: "With our tools, dealers can offer finance confidently and transparently online. It is what an increasing number of consumers want and it delivers the type of customer centric outcome the FCA wants at the same time. Product and pricing information needs to be online – and then the proposal process should be there as well. This is what we are offering dealers. If dealers choose to ignore this new reality, there is a direct lender ready and waiting."
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